Ethereum's on-chain metrics collapse under geopolitical pressure - What’s next for the price?

In the past week, the on-chain activity of Ethereum has been strongly affected as geopolitical tensions have increased, weakening investor confidence. The fall in network usage has raised concerns about bearish risks as the second quarter is about to end.

The on-chain metrics of Ethereum collapse under geopolitical pressure

According to a report from Artemis, Ethereum has witnessed a significant fall in user activity over the past week as tensions between Israel, Iran, and the United States escalated. Specifically, the number of daily active addresses on Layer-1 (L1) of Ethereum has decreased by 26% during this period.

! Ethereum Daily Activity Address | Source: ArtemisThis decline reflects a decline in engagement for both users and developers. In particular, the number of wallets initiating transactions, deploying smart contracts or interacting with decentralized applications (dApp) on L1 all showed signs of a sharp decrease. These are clear signals of a slowdown in Ethereum network activity, a trend that usually precedes a decline in transactions.

According to Artemis, the number of transactions on Ethereum also recorded a fall, decreasing by 14% during the assessment period. This situation reflects a contraction in community engagement and a disruption in trading activities on-chain.

! Ethereum Transactions | Source: ArtemisAnother important indicator of this decline is the shrinkage of the total value locked (TVL) in Ethereum's DeFi ecosystem. With TVL currently at $57 billion, down 10% from the previous week, this indicates that users are withdrawing capital or delaying the implementation of new projects amid the unstable geopolitical situation. This pullback is reducing liquidity across lending platforms, DEXs, and staking protocols.

Ethereum TVL | Source: ArtemisWhen trading falls, the demand for Ether also decreases, leading to a reduction in price momentum and contributing to the recent decline in the value of this asset.

Ethereum aims for the level of 2,569 dollars

In the context of the broad market witnessing a recovery, Ethereum has recorded an impressive growth of 7.3% in the past 24 hours, trading at 2,407 USD at the moment. Along with this price increase, the daily trading volume has also surged by 7%, reaching 28 billion USD, indicating the market's vibrancy.

When both the price and trading volume are rising simultaneously, this is a clear sign of strong confidence among investors, as well as an increasing level of participation in the market. This proves that the current price increase of ETH is driven by real demand and stability, rather than just a short-term speculative growth.

ETH Price Chart 1 Day | Source: TradingViewIf this positive trend continues, ETH may surpass the resistance level of 2,424 USD and move towards the level of 2,569 USD. In the event of continued upward momentum, Ethereum is fully capable of reaching the price level of 2,745 USD.

However, in a negative scenario, if the sell-off persists, the price of ETH may reverse and fall into the range of 2,185 USD.

Lilly

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